RALEIGH, N.C. — Mobile banking, which not long ago was the next new thing, is quickly becoming a must-have service for banks and credit unions.
While the service got its start at the nation's largest banks, it has been advancing through the ranks of regional banks and smaller community banks as the technology became less expensive and third-party vendors have begun offering it, said Tony Plath, a finance professor at the University of North Carolina at Charlotte.
Whereas in the tech industry, innovation often comes from start-ups, "in banking R&D is just too expensive for the little banks," Plath said. "So they always do a follower rather than a leader strategy."
At the moment, banks that offer mobile banking have a competitive advantage over those that don't, but that could be short-lived.
"I think we're probably two years from ubiquity, from the point where you just take it for granted," Plath said.
The attraction for banks is that handling a mobile transaction costs much less than if it's handled by a teller at a branch, he said.
Mobile banking varies depending on the bank or credit union. Services include: checking account balances; transferring funds; paying bills; reviewing past transactions; and depositing checks. The latter involves taking a photo of a check with your phone and sending it to the institution.
Also included in mobile banking is "text banking" — sending text messages to request and receive information about your accounts, such as balances and recent transactions. Unlike other mobile banking functions, text banking typically doesn't require a Web-enabled mobile device such as a smartphone. Any cell phone capable of texting will do.
Some banks and credit unions enable mobile banking via downloadable apps, while others have Web sites tailored for mobile access. Some offer both options.
Nationwide, nearly 21 percent of those who own mobile phones have used mobile banking over the past 12 months, according to a Federal Reserve Board report issued in March. And 11 percent of those who aren't banking by phone say they "definitely" or "probably" will within the next year.
Some consumers use the service as much as 60 times per month, although the median number of transactions is four or five per month. Checking balances is the most common mobile banking task.
A major obstacle to even more consumers adopting mobile banking is worries that some people harbor about security, the Fed report found.
Atlanta-based SunTrust, which has offered mobile banking since 2007, tries to allay those fears by offering its mobile customers this guarantee: "In the unlikely event that someone establishes unauthorized access to your account through SunTrust Mobile Banking, you are 100 percent covered for any funds removed from those accounts," the bank states on its Web site. "This reimbursement assurance includes loss of interest, insufficient funds, and overdraft charges.
Kristen Rankin, SunTrust's mobile channel manager, said the bank has never had to make good on that guarantee because there haven't been any incidents to date.